LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 20, 2001
TO: Honorable Kim Brimer, Chair, House Committee on Business
& Industry
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2613 by Hochberg (Relating to the payment and funding
of workers' compensation benefits for certain claimants
who work part-time or have multiple employment.), As
Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2613, As Introduced: impact of $0 through the biennium ending *
* August 31, 2003. *
**************************************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* Subsequent Injury Trust Fund *
* 0918 *
* 2002 $(1,600,000) *
* 2003 (1,600,000) *
* 2004 (1,600,000) *
* 2005 (1,600,000) *
* 2006 (1,600,000) *
*****************************************************
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* Subsequent Injury Trust Fund *
* 0918 *
* 2002 $(4,214,564) *
* 2003 (4,214,564) *
* 2004 (4,214,564) *
* 2005 (4,214,564) *
* 2006 (4,214,564) *
*****************************************************
Fiscal Analysis
The bill would amend the Labor Code to clarify the calculation of Average
Weekly Wage (AWW) for injured employees who are employed part-time or by
multiple employers. In the case of injured workers with multiple
employers, the AWW would be calculated based on the total earned wages,
rather than only the earned wages from the employer where the injury
occurred. This calculation would include non-subscribing employers. The
insurance carrier covering the employer where the injury occurred would
be responsible for all income benefits awarded by TWCC.
The bill would also allow insurance carriers to apply for and receive
reimbursement annually from the Subsequent Injury Trust Fund (SIF) for
the amount of income benefits paid to injured workers that were based on
nonsubscriber employment.
The bill would authorize TWCC to assess a maintenance tax to insurance
carriers, other than governmental entities, in an amount to generate 120
percent of any projected unfunded liabilities of SIF. SIF's current
funding comes from deposits of insurance carriers for death benefits
awarded when no legal beneficiary exists. Under the bill, this funding
stream would not change.
The bill would require a TWCC actuary or financial advisor to submit a
report biannually to the Research and Oversight Council on Workers'
Compensation (ROC) on the financial condition and project assets and
liabilities of the Subsequent Injury Trust Fund.
The bill would take effect on September 1, 2001 and apply only to
injuries occurring on or after that date.
Methodology
Scenario One:
The Research and Oversight Council on Workers' Compensation (ROC)
estimates the bill would have a cost of $1.6 million per year to the
Subsequent Injury Trust Fund (SIF) in additional benefits reimbursed to
insurance carriers. ROC bases this estimate on the projected 2002
Temporary Income Benefit's (TIBS) wage cap of $540 a week, an average
duration of benefits of 9.9 weeks based on the June 2000 System Data
Report from the commission, and 4,386 claims equaling a total system
impact of $7.3 million each year. Approximately 20 percent of those
claims are estimated to be reimbursable from SIF.
ROC's cost estimate is a compilation of the four possible scenarios for
benefit payments from SIF: 1. two full-time jobs; 2. two part-time jobs;
3. a full-time and a part-time job with the injury on the part-time job;
and 4. a full-time and a part-time job with the injury on the full-time
job. The bill would provide that TWCC assess a maintenance tax on
insurance carriers to generate 120 percent of revenues needed should a
deficit be projected for SIF.
The State Office of Risk Management estimates no significant fiscal
impact since very few of its claims are based on part-time employment.
Scenario Two:
The Texas Workers' Compensation Commission (TWCC) estimates the bill
would result in additional reimbursements from the Subsequent Injury
Trust Fund (SIF) of $4,214,564 per year. TWCC bases this estimate on an
AWW of $205.50 for a 30-hour work week. TWCC does not discuss the TIBS
wage cap in its cost estimate. TWCC also assumes a duration of 18.85
weeks which is the mean of the average number of weeks for income benefit
payments for calendar year 1996 through calendar year 1999. TWCC further
estimates an additional 1,088 claims reimbursable from SIF. The bill
would provide that TWCC assess a maintenance tax on insurance carriers to
generate 120 percent of revenues needed should a deficit be projected
for SIF.
The State Office of Risk Management estimates no significant fiscal
impact since very few of its claims are based on part-time employment.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated. Local fiscal impact would vary based on the number of
part-time or multiple employment claims.
Source Agencies: 453 Texas Workers' Compensation Commission, 479
State Office of Risk Management, 478 Research and
Oversight Council on Workers' Compensation
LBB Staff: JK, JO, RT, KM